IE 150 Problem Set 3 Present and Future Worth Factors Instructions: • Write/Type/Print your answers on yellow pad or bond paper (NO A4’s). Use a different sheet per problem. • Use phrases to describe what you are doing. Do not present it as just a series of equations and numbers. • Label each step. Ex: “Step 1: Set-up the Total Revenue Equation”, “Step 4: Solve for the NPV”. • Box the final answers. • Use clear formatting: Indent at each step. Show your answers in just 1 column. (The problem set will be read from top to bottom, and not top  bottom  diagonal right  bottom.) Problem 1: If you save 10% of your monthly allowance and invest the total amount at the end of the year, how much will it be 100 years from now if you invested in:

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Unformatted text preview: a. A bank that yields 3% per year. b. A government bond that yields 8% per year. c. A mutual fund that grows 15% per year. (State how much 10% of your monthly allowance is, this could be a false figure). (200 years from now. .. could be a gift for your great grand children). .. Problem 2: A friend you have not seen for more than 5 years suddenly appears at your house giving you PhP18, 000. He said it was from a loan 8 years ago. If you remember that your terms for the loan were at 3% every year, how much did you let him borrow 8 years ago? Problem 3: What is the interest rate of borrowing from a 5-6? (Wherein you borrow PhP 5.00, and the next day you need to pay him PhP 6.00....
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